Credit card vs Charge card - what’s the difference and which one to choose?

Not sure about the difference between a charge card and a credit card? While both can be handy for convenient spending in person and online, they do work differently in some important ways.

Before you pick the right card - or cards - for your needs, read our full guide on charge card vs credit card so you can work out which suits you the best. We'll also introduce the Wise account, a handy companion to make your money go further with low, transparent fees.

What is a charge card?

A charge card is a payment card which allows you to make purchases online and in person, with a monthly bill which you must settle in full by the due date. You might find that with a charge card there’s not an upper spending limit set, so you can use the card as often as you wish for purchases, as long as you’re able to make a full repayment when your bill comes in.

Charge cards are different to both credit cards and debit cards. All of these different spending card types have their own advantages and disadvantages, though, so it’s worth considering each of them when deciding which may work for you. We’ll dive into the detail of charge card vs credit card a little later to help you compare.

In Malaysia the primary issuer of charge cards is Maybank. Maybank issues 3 different charge cards, all on the American Express network¹:

• American Express Card
• American Express Gold Card
• The Platinum Card

It’s worth noting that these cards come with minimum salary requirements and may have fairly hefty annual fees. Depending on which card you pick though, you’ll also get a range of perks and benefits which may mean that the costs are worthwhile. The Platinum Card² for example has a minimum annual income requirement of 190,000 MYR/year, and an annual fee of 3,250 MYR for up to 5 cards. You’ll unlock a range of luxury benefits, but you’ll have to repay your bill in full monthly, or face a penalty fee³.

Charge card vs credit card - key differences

Now that yoy know what a charge card is, there are a few things which are similar between charge cards and credit cards:

• You can use both to spend in person and online, wherever the card network is accepted
• Both allow you to spend on credit, and repay the card issuer later
• You’ll likely pay an annual fee and a range of transaction costs with both
• Some sort of penalty is likely to apply if you fail to make required repayments on time

The way you use a charge card day to day is similar to the way you’d use a credit card. However, there are a couple of important differences:

• Credit cards typically have preset upper spending limits - charge cards may not
• Credit cards allow you to roll over some of your bill to pay in future - charge cards require you to clear your dues in full every month

Here’s a head to head run through of the key features of both charge cards and credit cards:

Credit card vs charge card - pros and cons

Both credit cards and charge cards have their own advantages and disadvantages, which can make them more suited to different customer needs. If you’re not sure where you land in the credit card vs charge card debate, here’s a quick summary of some important pros and cons of each.

Which one should you choose?

Whether a credit card or charge card is right for you will depend a lot on your personal preferences and how you like to manage your money.

If you’re confident that you can clear your bills every month, a charge card can offer more flexible limits and some great perks. This is especially so if you’re willing to pay a higher annual fee to unlock more benefits with a card like the Maybank Platinum Card. However, there’s not a huge number of banks which issue charge cards in Malaysia so you’ll have a limited choice compared to credit cards.

On the other hand, a credit card might suit you better if you’d like to spread the cost of purchases over a few months and don’t mind paying interest for this facility. There are many credit cards on the market, so the chances are that you’ll be able to find one which has benefits you’d value, with a balance of cost and convenience that suits your needs.

No matter whether you pick a charge card or a credit card, there will be some fees involved, so it’s important to read through the card terms and conditions carefully before you sign on the dotted line. Look out for penalty costs and charges, as well as transaction fees such as extra costs when you spend in foreign currencies. Or, pick a specialist card whenever you need to spend internationally, to drive down the costs of currency conversion - more on that next.

Shopping online or travelling abroad? Get cheaper and quicker conversions at the exchange rate you see on Google with the Wise card

The Wise card lets you spend in 40+ currencies at the mid-market rate including CNY, JPY, GBP, and SGD so you know you'll be getting a great deal in over 150+ countries. Simply create a free Wise account, order a card and top-up MYR to get started.

Virtual cards are free and can be added to your Google or Apple Pay wallet, while a physical Wise card can be ordered for a low fee of 13.7 MYR. Having a physical Wise card allows you to make chip and pin payments, as well as two free ATM withdrawals to the value of 1,000 MYR each month, before low fees start.

While abroad, you can choose to spend with directly in MYR and let auto-conversion do the trick, or convert to your desired currency with your Wise account. Either way, you’ll get the exchange rate you see on Google, with low, transparent fees from 0.77%.

🚀 Get Started with Wise

Sources:

1. Maybank charge cards
2. Maybank Platinum charge card
3. Maybank Platinum charge card - terms and conditions